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Prioritizing workers pays off even when wages don’t

Employee shortages and low wages. Supply chain disruptions and business closures. Non-existent benefits and unsafe working conditions—the economic consequences of the pandemic have exacerbated an employment market that’s been in decline for decades.

According to the New York Times, corporate consolidation and dwindling labor unions have led to worker compensation now being lower than at any point in the second half of the 20th century.

But while some businesses are struggling to find and keep workers, others have a stable workforce and report strong earnings. One common denominator appears to be strong unions and cooperative business models.

Lessons from the delivery industry

By 2021, corporate management at FedEx was facing a national trend: record numbers of US workers weren’t returning to jobs with low wages or dangerous workplace conditions. FedEx increased wages at ground facilities to attract and retain workers but by the last quarter of 2021, they reported overall losses for the year.

In contrast, UPS reported higher earnings in the same quarter while paying workers almost twice what FedEx Ground drivers earn for the same work. Employees at UPS credit their advocates at the package division of the Teamsters Union with securing them the highest wages in the delivery business. ( It should be noted that UPS also earns almost twice the return on invested capital that FedEx does, due to variances in how the two companies invest and reward shareholders.)

Unions don’t just negotiate for better wages and benefits for members. They also advocate for greater job security, more safety precautions, and increased gender and race equity—factors that are determined solely by corporate heads when union representation is absent.

Mitigating difficult work by empowering employees

The US has over 1.4 million home health care workers. Their work is demanding, with low wages, negligible benefits, high turnover and few health and safety protections. Most are women and people of color, employed by agencies that take a sizable cut of their earnings. Even when they work full-time, one in four home care aids lives at poverty level.

A new report by The Real News Network says worker cooperatives in the home health arena are proving to be more resilient, if not always immediately more profitable, than hierarchical commercial enterprises.

At Bronx-based Cooperative Home Care Associates, the support and education that workers receive have made it the largest cooperative in the US. It has 2,000 unionized employees, over half of whom are worker-owners. Members receive discounts on supplies and enjoy partnerships with other co-ops. Every worker has a vote in the direction of the business, and all are trained in financial literacy. After free training and three months on the job, they are eligible to become worker-owners.

“Working outside a cooperative, I had no control, no power over when I went to work, how much I made, how much money I put in, how much was taken out. Now I’m not just putting on a uniform and going to a 9-5 job, miserable. Here, I’m happy,” says CHCA worker-owner Pam Armstrong.

Because their clients are almost entirely dependent on Medicaid, CHCA employees work for $15, the minimum wage in New York State. Organized efforts to increase pay for home care aids have failed in the state so far but they aren’t giving up.

Public and private sector need legislation to strengthen the right to organize

Teachers and other public service employees are not protected by right to union laws in a majority of states. A study released in 2020 by the Economic Policy Institute recommends immediate passage of the Public Service Freedom to Negotiate Act and the Public Safety Employer-Employee Cooperation Act. It also strongly advocates for passage of the Protecting the Right to Organize (PRO) Act. The main provisions of the act would give private sector workers more support in creating unions and participating in collective bargaining. Although it was passed in the House of Representatives in 2021, the bill is currently stalled in the Senate.

Until employees are legally allowed to bargain for living wages, safe working conditions and immunity from predatory employers, jobs will remain unfilled, adequate housing will remain unaffordable, and the livelihoods of millions of Americans will remain in peril.

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